The recent ruling by a federal judge in California in the Uber-Waymo dispute is, to some extent, a victory for both sides and serves as a reminder of the high stakes in the race to develop autonomous vehicles. Earlier this week, the judge ruled that even though Uber could continue to develop self-driving cars, the ride-hailing company could not use its Lidar technology that it allegedly stole from competitor Waymo, Google’s autonomous vehicle unit.

Waymo sued Uber earlier this year after Anthony Levandowski, a former employee of Waymo, gave trade secrets from a confidential server to Uber, which included data about Waymo’s proprietary Lidar, an important technology in developing self-driving vehicles. U.S. District Judge William Alsup wrote: “The bottom line is the evidence indicates that Uber hired Levandowski even though it knew or should have known that he possessed over 14,000 confidential Waymo files likely containing Waymo’s intellectual property.”

Alsup said that Waymo “has shown compelling evidence that its former star engineer” had downloaded documents from Waymo’s computers before he left the company. The judge also told Uber to halt Levandowski and all other employees from using the downloaded information and return it to Waymo.

The Uber-Waymo case exemplifies how important it is for car and tech companies to be early movers on AVs.

Despite the judge’s orders, the ruling is good news for Uber in that it can move forward with developing and testing self-driving cars, even though the judge has added constraints from the injunction restricting its Lidar development. For Waymo, it can stay out in front of the race to develop self-driving cars, as one of its main competitors will be at a disadvantage since it is not allowed to use Lidar.

The case exemplifies how important it is for car and tech companies to be early movers on AVs. Waymo had started developing driverless technology a number of years before Uber and has also partnered with Lyft, Uber’s top ride-hailing competitor. The autonomous space is on the cusp of becoming a trillion-dollar industry that that will see explosive growth and profitability in the coming decades. “With 200+ startups and companies operating in the connected and AV space, the coming years will have stories about newfound partnerships in autonomy,” said Amitai Bin-nun, Director of the Autonomous Vehicle Initiative at Securing America’s Future Energy. “But there will also be cases like this one where previous allies have their relationships turn adversarial as they begin to compete in this critical area.”

“With 200+ startups and companies operating in the connected and AV space, the coming years will have stories about newfound partnerships in autonomy.”

The lawsuit has underscored not only how competitive the AV landscape has become, but also how top engineers and talent like Levandowski are in high demand. It’s unclear what Levandowski’s role will be going forward, but he cannot work on Lidar. Uber will have to develop its own technology, which could take many years and allow it to fall further behind its competitors. It could also purchase the technology from a third-party vendor, but those solutions might prove inferior to a custom built Lidar. The Waymo lawsuit has come during a turbulent year for Uber—it has reportedly lost thousands of customers to Lyft, an internal investigation was launched to look at its workplace culture, and the CEO was caught on video lashing out at a driver. In the self-driving realm, besides the issue with Waymo, leaked data show that Uber’s autonomous vehicles travelled only 0.8 miles on average before a human driver had to take over, making it clear that significant work is needed to improve the technology before deployment.

With autonomy set to transform transportation sector in coming decades, the current rivalries in the space reflect the fierce competition. In the coming years, expect the race to step up a notch as players try to outmaneuver each other, whether through technological breakthroughs, intellectual property, legislation, and even litigation.

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The Fuse is an energy news and analysis site supported by Securing America’s Future Energy. The views expressed here are those of individual contributors and do not necessarily represent the views of the organization.

Issues in Focus

Safety Standards for Crude-By-Rail Shipments

A series of accidents in North America in recent years have raised concerns regarding rail shipments of crude oil. Fatal accidents in Lynchburg, Virginia, Lac-Megantic, Quebec, Fayette County, West Virginia, and (most recently) Culbertson, Montana have prompted public outcry and regulatory scrutiny.

2014 saw an all-time record of 144 oil train incidents in the U.S.—up from just one in 2009—causing a total of more than $7 million in damage.

The spate of crude-by-rail accidents has emerged from the confluence of three factors. First is the massive increase in oil movements by rail, which has increased more than three-fold since 2010. Second is the inadequate safety features of DOT-111 cars, particularly those constructed prior to 2011, which account for roughly 70 percent of tank cars on U.S. railroads. Third is the high volatility of oil produced from the Bakken and other shale formations, which makes this crude more prone towards combustion.

Of these three, rail car safety standards is the factor over which regulators can exert the most control. After months of regulatory review, on May 1, 2015, the White House and the Department of Transportation unveiled the new safety standards. The announcement also coincided with new tank car standards in Canada—a critical move, since many crude by rail shipments cross the U.S.-Canadian border. In the words DOT, the new rule:

Since the rule was announced, Republicans in Congress sought to roll back the provision calling for an advanced breaking system, following concerns from the rail industry that such an upgrade would be unnecessary and could cost billions of dollars. The advanced braking systems are required to be in place by 2021.

Democrats in Congress have argued that the new rules are insufficient to mitigate the danger. Senator Maria Cantwell (D-WA) and Senator Tammy Baldwin (D-WI) both issued statements arguing that the rules were insufficient and the timelines for safety improvements were too long.

The current industry standard car, the CPC-1232, came into usage in October 2011. These cars have half inch thick shells (marginally thicker than the DOT-111 7/16 inch shells) and advanced valves that are more resilient in the event of an accident. However, these newer cars were involved in the derailments and explosions in Virginia and West Virginia within the past year, raising questions about the validity of replacing only the DOT-111s manufactured before 2011.

Before the rule was finalized, early reports indicated that the rule submitted to the White House by the Department of Transportation has proposed a two-stage phase-out of the current fleet of railcars, focusing first on the pre-2011 cars, then the current standard CPC-1232 cars. In the final rule, DOT mandated a more aggressive timeline for retrofitting the CPC-1232 cars, imposing a deadline of April 1, 2020 for non-jacketed cars.

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DataSpotlight

The recent oil production boom in the United States, while astounding, has created a misleading narrative that the United States is no longer dependent on oil imports. Reports of surging domestic production, calls for relaxation of the crude oil export ban, labels of “Saudi America,” and the recent collapse in oil prices have created a perception that the United States has more oil than it knows what to do with.

This view is misguided. While some forecasts project that the United States could become a self-sufficient oil producer within the next decade, this remains a distant prospect. According to the April 2015 Short Term Energy Outlook, total U.S. crude oil production averaged an estimated 9.3 million barrels per day in March, while total oil demand in the country is over 19 million barrels per day.

This graphic helps illustrate the regional variations in crude oil supply and demand. North America, Europe, and Asia all run significant production deficits, with the Middle East, Africa, Latin America, and Former Soviet Union are global engines of crude oil supply.